Retirees choose less suitable annuities over deferred income or immediate annuities
Updated
Updated · CNBC · Apr 24
Retirees choose less suitable annuities over deferred income or immediate annuities
8 articles · Updated · CNBC · Apr 24
In 2025, U.S. annuity sales reached a record $464.1 billion, with retirees buying $128 billion in indexed annuities and $63 billion in variable annuities, but only $5 billion in DIAs and $14 billion in SPIAs.
Financial planners say behavioral biases and misunderstanding lead retirees to favor complex, flexible products with higher fees over simpler, more cost-effective annuities that provide better longevity protection.
Experts recommend covering basic living expenses with guaranteed lifetime income, such as delaying Social Security or purchasing SPIAs or DIAs, but acknowledge that product complexity and irrevocability deter many consumers.
Retirement anxiety is fueling record annuity sales, but are buyers choosing complexity over the security they truly seek?
Is the fear of losing a lump sum causing retirees to buy riskier, more expensive annuity products?
If Chileans with guaranteed income live longer, what is the true cost of financial anxiety for American retirees?
Are experts wrong? Do popular complex annuities offer flexibility that retirees rightly value more than simple income?
As insurers profit from complex annuities, what are the hidden risks to consumers and the financial system?